“The power industry requires long-term predictability of
the EU’s commitment on the decarbonization of the energy system,
in order to make the necessary investments in technological
innovations and the low-carbon energy supply chain to bring down
the costs,” Dutch energy company Eneco Holding NV, Denmark’s
Dong Energy A/S and U.K.’s second-largest electricity producer
SSE Plc said in a statement today.

The 27-nation EU has a binding target to reduce greenhouse
gases by 20 percent in 2020 compared with 1990 levels and wants
to limit them by as much as 95 percent by 2050. In a policy
paper published earlier this year the European Commission, the
bloc’s regulatory arm in Brussels, said the most cost-effective
way to reduce pollution would be to cut carbon discharges by 40
percent in 2030 and by 60 percent in 2040.

The commission document, known as the EU low-carbon
roadmap, also showed that carbon-dioxide discharges may fall by
25 percent by 2020 compared with 1990, as long as the EU steps
up energy-saving measures.

‘Significant Policy Gap’

“The European power sector should do its share by
investing in a secure, affordable and carbon-neutral power
supply in Europe by 2050,” Eneco, Dong Energy and SSE said.
“Current EU policies will not allow the EU to meet its
objective of 80-95 percent emissions reduction by 2050. The
coalition believes that this is largely due to the significant
policy gap between 2020 and 2050.”

The price of carbon allowances in the bloc’s emissions
trading system, known as the ETS, may fall if new policies lead
to “dramatic” energy efficiency gains, Bloomberg New Energy
Finance said in April. Permits for delivery in December traded
at 9.04 euros ($12.24) a metric ton on the ICE Futures Europe
exchange in London today, down 37 percent this year on concern
that the market is oversupplied.

The ETS is a cornerstone of Europe’s climate initiative,
putting limits on more than 11,000 utilities and manufacturing
companies, including Germany’s biggest utility EON AG and the
continent’s largest oil company Royal Dutch Shell Plc. It leads
to a cap in 2020 that would be 21 percent below 2005 discharges.

The commission is due to present next month a plan for the
bloc’s energy sector by 2050. The policy paper will focus on
decarbonizing the EU economy after 2020 while guaranteeing
competitive markets and security of supply, Philip Lowe,
director general at the commission’s energy department, said
last month.

Eneco, Dong Energy and SSE are “asking for more clarity
over the medium-term and encouraging the European Commission to
present an ambitious Energy Roadmap 2050, which addresses the
current discrepancy between long-term energy and climate
objectives, mid-term milestones and current short-term
policies,” according to the statement today.